This from the Telegraph:
In scenes reminiscent of the height of the financial crisisin 2008, the Dow Jones Industrial Average – America’s benchmark share index – briefly plunged by 998.5 points in late trading, dropping to a low of 9869.62.

The frenetic 30 minutes of trading, which started at 2pm New York time, fuelled fears that Europe’s sovereign debt crisis could precipitate a second financial meltdown. Although markets recovered some of their poise, the Dow closed more than 3pc down at 10,520.32…more

This from the NYtimes:
For a short time Thursday afternoon, Wall Street returned to the tumultuous days of 2008.

In a moment of uncontrolled selling, major indexes fell nearly 9 percent. The Dow Jones industrial average tumbled more than 550 points in about five minutes, falling almost 1,000 points on the day. The Standard & Poor’s 500-stock index and the Nasdaq followed suit. Computer programs intensified the selloff as markets fell through trading limits.

And then, almost as quickly, the markets recovered most of the decline.

At the close, the Dow was down 347.80 or 3.2 percent, to 10,520.32. The S.&P. dropped 37.75 points, or 3.24 percent, to 1,128.15, and the Nasdaq was down 82.65 points, or 3.44 percent, to 2,319.64….more

UPDATE:
Some Murdoch websites are now suggesting that the huge plunge may have been a simple trader error.

“ A TRADING error known as the “fat finger problem” at a major investment bank may have caused a huge plunge in the US stock market overnight.”

The article claims that a trader hit ‘b’ for billion instead of ‘m’ for million.